Former Dragons’ Den star Richard Farleigh tells Tim Williams about investing in bright ideas and what he really thinks of the other Dragons…
“All ideas are worthless.” This is, perhaps, a surprising thing for investor Richard Farleigh to say, but it doesn’t put off students proposing their own big ideas to him after his talk at the Oxford Union, leaving me waiting a while for them to finish.
I later find out that what the former Dragon means is that, for all the bright inventions originating from places like Oxford, it is in the execution of those ideas and their commercialisation that the value lies. “If I was the government here, I’d be encouraging the universities to commercialise more.”
Recalling the days when he used to hunt around the city searching for good ideas he could seize upon, he cites Isis Innovation, a subsidiary of Oxford University, as one of the key catalysts for turning research discoveries into businesses. “It was only just setting up when I was knocking around here. There was a lovely fella called Herb who I used to deal with; it was very personal but there was a shortage of investors – and there still is.” One of the projects he is now most excited about is an investment he’s made in a drug company in Southampton University that may have found a breakthrough in asthma treatment. But “despite the progress” its share price is lower than it was eight years ago.
“To invest in these ideas may be world changing but it won’t be like Facebook, where you become a billionaire in four years. It may take ten years to make progress. It’s a long hard slog. It’s also a pity there aren’t enough investors to get these ideas going, because the intellectual property in universities is a jewel in the crown of the United Kingdom.”
This makes Farleigh a man in demand. The Australian is best known in Britain for his appearances on Dragons’ Den, a TV show where he and a panel invested – or not – in ideas from budding entrepreneurs. Since then he’s starred in Celebrity Masterchef but reveals he turned down “the dancing and the jungle ones” (reality TV staples).
In 2007, after two series in the Den, he was dropped by the BBC. ‘Solid rumours’ suggested that it was to racially alter the panel, which he publicly bemoaned.
“At the time, I had a PR guy who wanted to say how annoyed I was but I was actually pretty happy, very grateful to the BBC and I enjoyed my time.”
He gleefully adds, “I guess I could be a bit smug and say the ratings are down since I left and apparently I’m the most popular dragon ever to have been on the show.”
So, what does he make of his immediate replacement James Caan and his subsequent successor Hilary Devey? I sense a stark contrast in his enthusiasm for the pair.
“I’ve only met James a few times, I don’t know him very well. I think he’s very cluey… I think Hilary is fantastic. I love her story, I’ve met her, she’s got a sense of humour, she’s a northerner – she’s one of my people in a way. I always think the Northeners are a little bit like the Aussies. She’s very tough, very smart, a very giving person, very sweet.”
Like Hilary, Richard did things the hard way. A problem child in Australia, he initially struggled at school and became a foster child. But then he found a talent for chess (he has since played in Olympiads), his teachers realised his shyness was not a sign of backwardness and he went on to achieve an economics degree.
After a successful career as an investment banker, he retired to Monaco aged just 34. Wanting “a more meaningful life” he started the road to what he does now, investing in start-up businesses.
Based in the UK, he’s seen a lot of economic fluctuations. As an investor, the economic crisis “has actually been quite good. It’s very hard when there’s a bubble on.”
He sees the downside, however, particularly for high-end research start-ups “because it’s risky”. “Risky things are the first things investors throw out when they’re worried about things.”
His broader view is that the country has to focus on what it does best – “high-tech, clever ideas”. Recent calls to boost manufacturing are, he says, “a red herring”. “It left because of wage rates, it went to the most efficient place to manufacture. It wasn’t kicked out or a decision by Margaret Thatcher. It was a by-product of global patterns. Politicians saying it was Thatcher is absolute rubbish. The solution to that is not to build more cars, it’s to build the clever parts of the cars. The reason Germany and Japan kept their manufacturing was because it was high-end stuff, the clever stuff.”
On the growing anti-rich culture, he has a warning. “The UK has to be careful… My view is that wage rates across the east and west will equalise over the next 50 years. That means those with skills will be paid more and the wage divide will widen. It will lead to jealously of those with skills, strikes, election changes, a big impact on the world as the east becomes wealthy. At the end of the day, the UK is a small island, has solid history, a reliable government, the city of London. Bankers are partly to blame for problems but people do what they can. If they can get a bonus, they can. They’re no worse than the bus driver taking the afternoon off.”
“The UK shouldn’t get too anti-successful people. I’ve got to admit that even me, who did it pretty tough, will feel that if the mood is going to get that bad that people hate you because you’re successful then you might as well go somewhere else.”
Handing out signed copies of his book to the Oxford Union audience, his main tips are “to put something unique in the first sentence of your email” and “patent before publishing”. The latter was a major fault of researchers in the past who published their ideas and then lost their property.
Farleigh receives hundreds of emails each week pitching for cash. While he’s chatting to those lucky enough to grab his attention face to face, I ask a lady accompanying him whether he uses another email account for personal, important emails. Her answer reveals something about the ethic of a man who came from nothing to be successful. “I don’t think that’s the way he works. He reads everything. He doesn’t want to miss a thing.”
This interview was provided courtesy of the Oxford Union